Dominic Iannitti, president and CEO of doc prep and compliance firm DocMagic, says he is ‘excited’ that the company has been selected to participate in the Consumer Financial Protection Bureau's (CFPB) e-closing pilot program, which will explore the viability of developing a standard process for closing mortgages using technology.
In addition it will be working with title production software provider Pavaso, a spin-off of RamQuest Inc., in developing e-closing technology in connection with Franklin First Financial.
‘Lenders must find more efficient ways to ensure compliance without increasing their loan origination costs or cutting corners,’ Iannitti says in a release. ‘Implementing a secure electronic process with built in compliance audits is the best way to accomplish efficiencies, ensure compliance and keep costs down. Lenders who take advantage of these new technologies will have a competitive advantage over their peers and will see higher borrower pull thru and customer satisfaction levels as well.’
DocMagic is one of just five technology vendors selected for the pilot program, which is designed to further evaluate e-closing solutions and to determine how these solutions can help achieve the proposed vision for an improved closing process. In launching the program, the CFPB aims to achieve three goals: make it easier for borrowers to understand the closing process; provide borrowers adequate time to review closing documents; and enable borrowers and lenders to identify and correct errors in documents prior to closing.
‘Going electronic is more efficient for all parties involved in the origination process,’ says Tim Anderson, director of e-services for DocMagic. ‘Origination costs are reduced, compliance is improved, consumers are better protected, and loans will simply close faster than in a paper environment. The ability for all parties to collaborate, view and execute online will significantly reduce issues at closing and ensure a much more enjoyable, compliant and transparent closing experience.’
Mountain America Credit Union and Franklin First Financial are among seven lenders selected to participate in the pilot. Mountain America Credit Union has been supporting hybrid e-closings for some time now. In fact, the credit union partnered with DocMagic for its e-sign compliant loan documents to e-close one of the industry's first electronic Federal Housing Administration loans in March.
For its part in the pilot program, DocMagic will provide fully compliant e-documents in coordination with Mountain America's platform for electronic document management, Quick Close. All documents will then reside within Quick Close, where they can be shared and e-signed by all participants (lender, seller settlement and real estate professionals) online in real time.
DocMagic will also provide Mortgage Electronic Registration Systems (MERS) e-registry and e-vaulting services. This platform is certified by MERS e-registry, having successfully passed all certification tests.
DocMagic points out in its release that its MISMO category one SMARTDoc e-notes have been vetted by FannieMae. Getting the actual note into a secure and standardized electronic format has been one of the last hurdles in developing a true end-to-end e-mortgage system.
In a separate release, Iannitti says through DocMagic's with partnership with Pavaso, the two companies will be able to ‘show the industry and the CFPB that any lender can make the closing process better for consumers through the use of a completely electronic process without incurring the time and cost of creating or maintaining their own systems.’
‘One of the prior issues with getting adoption for e-closing was providing the title and closing agents with a simple solution they could use to support their part of the closing process,’ says Anderson. ‘Pavaso has developed a system that can easily be implemented as a Web service, allowing all participants involved in the transaction to sign up, log on and use it.’